Two weeks after the news of the deal was first reported, Apple has officially announced its buyout of Beats Electronics for $3 billion.
Apple will keep the Beats headphone and Beats Music brands separate as part of the deal. As previously reported, Dr. Dre and Jimmy Iovine will join Apple full time.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Apple CEO Tim Cook. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”
This acquisition is Apple’s biggest ever, which it will be paying for with $2.6 billion in cash and $400 million in stock.
It’s unclear if Apple will give Beats headphones special placement in its retail stores, where it also sells other competing brands.
“I’ve always known in my heart that Beats belonged with Apple”
“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine, who also currently serves as the Chairman of Interscope Geffen A&M Records, in a press release. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
Iovine, who was a personal friend of Steve Jobs, was seen as a key reason for Apple’s interest in Beats when news of the deal first started circulating. Steve Jobs biographer Walter Isaacson said he could be the key to Apple closing key deals with not only music, but video content makers.
Beats Music CEO Ian Rogers will report directly to Eddy Cue, Apple’s internet software and services chief. Whether the Beats Music app will continue to be offered in the App Store as it is now remains to be seen.
“The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years,” said Cue.
Iovine and Cue will be interviewed together onstage at the Code Conference, where they will hopefully discuss the deal in more detail. We’ll have more on what they say during the interview later tonight.